US gold futures hit record high on tariff rule

The price of gold on the US futures market hit a record high Friday after customs authorities clarified that President Donald Trump’s fresh tariffs apply to some gold bars — threatening to upend global trading of the precious metal.

The update, first reported by the Financial Times on Thursday, said that gold bars weighing one kilogram and 100 ounces are classified as subject to tariffs by the US Customs Border Protection agency.

In reaction, gold for December delivery reached an all-time high at $3,534.10 an ounce (31.1 grams) on the Comex, the world’s biggest futures market.

Gold, seen as a safe haven investment, already this year reached record highs on tariff concerns and geopolitical unrest.

The US customs decision, detailed in a ruling letter dated July 31, was made public on Friday. Such letters are used to clarify trade policy.

But the outcome contrasts with expectations that gold bars would be classified under a different customs code that excludes them from Trump’s sweeping “reciprocal” levies hitting various US trading partners including Switzerland.

Commerzbank analyst Carsten Fritsch said Friday that tariffs on bullion “would have serious implications for the gold market”, with key supplier Switzerland already subject to hefty US tariffs.

One-kilo bars are the most common form traded on Comex and comprise the bulk of Switzerland’s bullion exports to the US, the FT said.

Fritsch noted that “gold bars of this size imported from Switzerland into the US would be subject to a 39-percent tariff”.

The amount is one of the highest tariffs in the latest wave of “reciprocal” duties imposed by Washington — to address what Washington deems as unfair trade practices. They entered into force on Thursday.

“Switzerland is a major supplier of gold bars because it is home to many gold refineries that melt down gold into specific bar sizes,” Fritsch pointed out.

Ole Hansen, head of commodity strategy at Saxo bank, added that “the US futures market is often used by bullion banks globally as a hedging tool for transactions in the physical bullion market”.

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